Infrastructure Indaba: Towards Improving Delivery of Infrastructure and Engineering Services

Speaking at the recent inaugural 2015 Infrastructure Indaba hosted by the Consulting Engineers South Africa (CESA), the Ekurhuleni Executive Mayor Councilor Mondli Gungubele said that Consulting Engineers are a critical partner in the developmental agenda of municipalities and that the mandate of local government can only be achieved sustainably if the technical fundamentals of the infrastructure provided are not flawed.

"In the past municipalities had the technical capacity to do designs and implement projects with limited complementary support from the Consulting Engineers. However, with gradual drifting of engineers from Local Government into the consulting industry, this capacity has become completely eroded. Consulting Engineers offer technical expertise that ensures sustainability, serviceability, affordability and availability of infrastructure," proclaimed Gungubele.

He added that the National Development Plan (NDP) is anchored on social and hard core infrastructure development and it is therefore imperative for engineers in general to acquire and maintain technical knowledge and skills at levels consistent with developmental needs of the society, advancement in technology, changes in legislation and Local Government Strategies.

CESA Past President Abe Thela, assured delegates that will continue to support the intermediate initiatives by other Government Departments which are designed to beef up Government capacity and capability to roll out new infrastructure and maintain existing infrastructure. In addition, CESA will continue to work with Government in finding long term solutions for the lack of engineering capacity and capability in the public sector.

The initiatives include: secondment of engineers from private sector to government departments and municipalities, establishment of Project Management Units managed by consulting engineers and other Built Environment Professionals, employing consulting engineers for pre-feasibility work and using retired engineers.

"Of concern however is the court action initiated by the City of Cape Town against one of our member firms to prevent the appointment of consulting engineers involved in pre-feasibility studies in the downstream phase of work. Currently the case is at the Supreme Court of Appeal and we are hopeful that the ruling will be in favour of allowing pre-feasibility studies consulting engineers, who undertake pre-feasibility studies to participate in downstream work," cautioned Thela.

The theme for the Infrastructure Indaba was "Towards Improving Delivery of Infrastructure and Engineering Services". It emanates from and is the culmination of CESA 2015 annual theme, namely, "Meeting socio-economic challenges through sustained infrastructure investment". Under this theme CESA dealt with the state of the country's infrastructure investment as well that of the engineering human-capital development.

According to the NDP, the Government needs to spend at least 20% of the country’s Growth Domestic Product (GDP) on infrastructure development in order to attain the objectives of the NDP. Currently THE Government is only managing to spend about 14% of the GDP on infrastructure and when you take this infrastructure spend as a percentage of the targeted GDP which is growing at 5%, South Africa's performance in public infrastructure investment is sorely lacking.

"We acknowledge that much has been done by the government to deliver infrastructure but the demand for infrastructure development far exceeds the available government financial resources", said Thela.

He continued to state that much more infrastructure is needed for the acceleration of service-delivery as well as the socio-economic development of our country. Minister Nhlanhla Nene had alluded to the constraint in the Government purse when he concluded his 2015 medium-term budget speech by saying "Without economic growth, there is not revenue growth, and without revenue growth, expenditure cannot increase and the nation cannot develop and succeed."

KPMG has estimated that the continued underinvestment in infrastructure will result in an infrastructure funding gap of approximately R6.5 trillion by 2030. This spells disaster for the social and economic development of our country and requires urgent and focused intervention by all South Africans.

CESA has identified three possible avenues that should be explored, alongside others, to close this growing infrastructure gap.

The first avenue is for the private sector to increase its investment in public infrastructure development. It is estimated that South Africa’s private sector has over R1trillion in cash which is sitting idle in low interest-earning accounts. Some of this money could be invested in public infrastructure through the conventional Public Private Partnerships (PPP). Other institutional arrangements also exists for the private sector to avail its financial resources for public sector infrastructure development. However there are obstacles that must be dealt with prior to realising and maximising this potential and these include: lack of technical capacity and capability to package projects, mistrust between the public and the private sectors and misconception that the conventional PPP is 'privatisation'.

The second area of opportunity to maximise infrastructure investment, is the maintenance of existing infrastructure to ensure that the existing infrastructure remains serviceable for the duration of its design life and beyond. Lack of maintenance of existing infrastructure results in premature failure of infrastructure with associated high replacement costs accompanied by widespread negative socio – economic consequences such as interrupted service delivery, loss of productivity in the economy, disruption to industry & economy and the waste of natural resources.

The third area of opportunity to maximise infrastructure investment, is addressing inefficiencies in the Supply Chain Management system and more especially as it applies to Consulting Engineers and BEPs in general. These inefficiencies include:
inappropriate approaches for procuring consulting engineering services, lack of technical project management capacity & capability in the public sector (resulting in poor planning and poor management of implementation of infrastructure projects), lack of other desired technical skills in the public sector (impacting negatively on maintenance of existing infrastructure) and rampant corruption.

"Huge sums of public money are lost due to these inefficiencies and addressing them will release billions of rands back into infrastructure development and other economic activities," stated Thela.

Department of Transport Director General Pule Selepe said that the Government regards the Infrastructure Indaba as a crucial platform for sharing its own experiences and also for learning from the industry about how the private sector can contribute towards the radical transformation of our economy.

"We believe that we all have the responsibility to oversee the development of our infrastructure and we have no doubt that this gathering today will continue to expand and enrich our collective knowledge and resolve," noted Selepe.

FIDIC Vice-President Eng. Exaud Mushi pointed out that interests in procurement of consulting services under Quality Based Selection (QBS) is likely to rise because large and diverse projects require: flexibility in extent of investigation consideration of alternative designs and expertise, experience, judgement, innovation and imagination.

"QBS will dominate as a procurement method and is likely to dominate because of the need for quality of engineers/consultants who can deliver. Clients will want to see consultants taking more responsibility on performance," warned Mushi.

In her inaugural speech, CESA President Lynne Pretorius indicated that South Africa is on a dynamic trajectory that requires visionary leadership and flexibility from all stakeholders and role players, to adapt to the changing and challenging environment currently prevailing. She stated that her key objectives are to get the CESA’s house in order, encourage members to submit quality bids and to be open and honest about corruption.

"Concerted effort is required from all of us to address the imbalances of the past thus creating a South Africa that everyone is proud of. Government requires us to transform our industry. We realise that this is a long-term process but we have to align ourselves to leverage business opportunities," said Pretorius.